Hannover Re adjusts dividend policy with goal to increase it each year

In view of the firm’s very good capitalisation, the Executive Board of global reinsurer Hannover Re has decided to realign its dividend policy, set to take effect from the 2025 financial year.

Under the new policy, the payout ratio for the regular dividend will be raised to approximately 55% of IFRS Group net income, a notable increase from the 46% total dividend payout ratio in 2024.

According to the reinsurer, this adjustment reflects the company’s ability to generate profitable growth while distributing a larger fortune of its earnings to shareholders.

“Furthermore, the goal is to distribute a dividend per share at least on the level of the previous year and to increase it over the long term. The special dividend, a tool which has been routinely used in the past, will become part of the regular dividend. Going forward, it is envisaged that an additional special dividend will only be used in exceptional circumstances,” the firm added.

Analysts from Goldman Sachs view this as a positive, estimating that the increase in the dividend pay-out ratio to 55% suggests a potential full-year 2025 dividend per-share of as much as €11.70.

This would represent an increase of around 16% compared to the previous year, highlighting the significant impact of the new policy on shareholder returns.